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Tuesday, January 1, 2013
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BRAVO Bangladesh eyes $20b in New Year

Retaining its position as the 2nd largest RMG exporter

Bangladesh enters 2013 with a firm footing as the world's second largest garment exporter, raising hopes for a new wave of business despite turbulent times in parts of the globe.

The World Trade Organisation declared Bangladesh as the second largest RMG exporter after China in 2010-11 when the country's export grew 43.36 percent year on year to $15.66 billion in spite of global recession in 2007-2008.

Bangladesh retained its position in the following fiscal 2011-12 by exporting garments worth $19.09 billion. And the outlook for the current fiscal is set to exceed $20 billion.

Bangladesh now claims 4.8 percent of the global RMG trade of $412 billion.

According to McKinsey & Company, an international management consulting firm, Bangladesh's apparel exports will reach $36 billion by 2020.

Some key market players believe that the country's potentials are even greater.

But all these prospects appear to have been shaken by one fire tragedy in late November at Tazreen Fashions Ltd, where 112 workers were killed. This single incident exposed inadequate fire safety and poor working conditions that still exist in many factories.

The incident was widely covered worldwide mainly because of Bangladesh's position as the number two apparel exporter. The buyers are now pressing factory owners to improve working conditions, hike wages of workers, and ensure labour rights and other compliance issues.

Following the event, many international non-governmental organisations campaigned for restricting purchase of Bangladeshi garments until the garment makers here ensure workers' safety and labour rights.

The apparel sector may face some hurdles this year unless the issues of proper working environment, better wages and labour rights are resolved.

Exporters here still remain hostage to large-scale buyers, who always try to pay the lowest possible rate for apparel items. The garment makers need to persuade these buyers to pay more so that they can address the compliance issues at home.

In order to retain its position, Bangladesh has to ensure adequate supply of gas and power, make available industrial lands, combat corruption, improve infrastructure and port efficiency, ease traffic congestion and develop skilled manpower.

Several factors such as availability of cheap labour, quota facility, cash incentives against export and entrepreneurial skills have helped the RMG sector grow since the country's entry into the global market. Bangladesh enjoyed quota-free status till 1985.

Following the imposition of quota restriction by the USA and the EU, Bangladesh with enough manpower utilised its allocated quota to the full compared to neighbouring India, Pakistan, Sri Lanka and Nepal.

Bangladesh managed to supply garment items to international buyers at competitive prices without having two important basic requirements -- cotton and machinery.

Now, Bangladesh is not only a supplier of basic garment, but also a major destination for high-end apparel items.

The strength of the country's apparel sector is well understood through its ability to supply high-end items to famous global brands such as Hugo Boss, Adidas, Puma, Tommy Hilfiger, G-Star, Diesel, Ralph Lauren, Calvin Klein, DKNY, Nike, Benetton and Mango. Currently, more than 30 percent of the total RMG export is high-end products.

The primary textile sector also saw a wave of investments for increasing demands for fabrics.

The sector with a total investment of over 4.5 billion pound is now capable of supplying 90 percent of fabrics for the knitwear sub-sector and 40 percent of fabrics for the woven sub-sector.

It took three decades of hard work for the country's garment sector to achieve its position today.

The journey started in 1978, with a shipment of 10,000 pieces of men's shirts worth 13 million Franc to a French company by Reaz Garments Ltd.

Desh Garment Ltd, the first fully export-oriented garment factory of the country, entered the global market the following year.

In 1980, South Korean Youngone Corporation formed the first joint-venture garment factory with a Bangladeshi firm, Trexim Ltd.

The number of garment factories in the country rose to 587 in 1984-85. With the arrival of many international buyers, the figure jumped to around 2,900 in 1999.

In 2005, Bangladesh with an increased number of production units became one of the 12 largest apparel exporters in the world.

Now, the country has more than 5,500 woven garment factories, 1,700 knitwear factories and 1,300 spinning, finishing and dyeing factories.

At present, the sector employs 3.5 million workers, 80 percent of whom are women.

The country's 60 percent RMG products enter the EU, 23 percent goes to the USA, 4.8 percent to Canada and 12.1 percent to other destinations worldwide.

According to data of Export Promotion Bureau, the RMG sector's contribution to the country's export was 3.9 percent in fiscal 1983-84, which now stands at nearly 80 percent.

The country's banking and financial institutions, and insurance and services sectors are largely dependent on the RMG sector.

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We achieved it by the hard work of our RMG workers. But matter of sorrow that they are mostly deprived from their rights. So, we should concentrate to the benefits our workers.

: Noman

Historically Bangladesh has been the leading and most celebrated manufacturer of cotton textiles from time immemorial. The revival of this sector in a changed setting to cater to the needs of the foreign consumers has progressed very satisfactorily since the early 1980’s. Not only the industry is bringing in foreign currency in ever increasing measure, it is providing employment to no less than four million operatives, 80 percent of whom are women. It is within sight when we would fetch 20 billion dollars and probably as much as 30 billion in 7 to 8 years time provided there is political stability and uninterrupted supply of utility services. The shifting of manpower and capital by PRC to higher value production industries is likely to divert production centres towards Bangladesh having an enormous pool of cheap labour. But factory owners must adjust labour wages upwards and improve to create congenial working atmosphere so that they remain contented with their living conditions and safety.

: Iftikhar-ul-Awwal

Comments

  • commenter
    Tuesday, January 1, 2013 01:52 AM GMT+06:00 (90 weeks ago)

    Feels good! Would have felt better if the work-forces who made us where we are now are well-treated, provide with moderate work-conditions, better salary within the country's standard. I wish that the government spent more within the agricultural sector.

  • Al-Amin Rehman
    Tuesday, January 1, 2013 01:55 AM GMT+06:00 (90 weeks ago)

    Congratulations Bangladesh.

  • Misbah Uddin Sumon
    Tuesday, January 1, 2013 02:09 AM GMT+06:00 (90 weeks ago)

    This is the plan of New Year what could be achieved in running year. This will be a turning point for Garment sector of Bangladesh.

  • Tirtho Mahmud
    Tuesday, January 1, 2013 02:12 AM GMT+06:00 (90 weeks ago)

    It is certainly admirable, but in the light of Ashulia incidence of 2012, we hope the large exporters will spread their fortune to the lower levels of the work force. Happy employees are always most productive.

  • neutral
    Tuesday, January 1, 2013 02:29 AM GMT+06:00 (90 weeks ago)

    What a success story of the private sector despite scary political uncertainties and deadly hartal, road block and suicidal sabotage in Ashulia fire in a garment factory leaving few dozen death of poor female garment workers. The news of sabotage has appeared to day duly corroborated by a government run enquiry on the deadly incidents. What about the safety measures of the helpless workers and ensure their life to be safe and survive by this strong safety net export oriented projects in garment sector? Has any thing done yet or leaving to die in short public memory?

  • OpeeMonir
    Tuesday, January 1, 2013 02:52 AM GMT+06:00 (90 weeks ago)

    Project management is not an easy subject; you may have the best engineers, best raw materials, best design and the required fund to complete the project...not necessarily a completed project which will serve its purpose as proposed due a number of factors. What goes wrong terribly is that the design is being compromised dangerously, due to multiple level of corruption the fund depletes very fast and finally what people get is a weak construction where safety is compromised equally dangerously. So, we have those footbridges which are not so safe and public sentiment is poor due to accidents in the past. These projects lost public confidence.

  • nuton
    Tuesday, January 1, 2013 02:57 AM GMT+06:00 (90 weeks ago)

    I’d love to wish PM Sheikh Hasina for her enormous efforts for Bangladesh economic growth. Happy New Year to you Prime Minister. Keep up good work you’re doing. Bravo Bangladesh.

  • nuton
    Tuesday, January 1, 2013 03:08 AM GMT+06:00 (90 weeks ago)

    Bravo Bangladesh and bravo The Daily Star that we’re proud of, you’re doing an excellent job keeping us up to date news 7/24. Thank you. Happy New Year 2013.

  • rch
    Tuesday, January 1, 2013 03:36 AM GMT+06:00 (90 weeks ago)

    Little empathy towards the workers with increase in pay and benefits will immensely help our position. Just imagined Bangladesh without Abuls and enforcement of rue of law ---Bangladesh will surge ahead.

  • Syed Imtiaz Ali
    Tuesday, January 1, 2013 04:19 AM GMT+06:00 (90 weeks ago)

    Good news indeed! All this is due to the private sector's entrepreneurship. A lot more remains to be done as we are manufacturing only 4.8% of world RMG volume. This is a very important sector for BD and the govt must chalk out a supporting policy and add facilities to do business and export in RMG. RMG village away from city, Decent Minimum salary, Technical institutions and/or courses on RMG/apparel merchandising with universities and so much more can be initiated. Most of the technical and management heads are either Indian or Sri Lankan. With the huge number of under-employed we must have our own people managing matters and taking decisions. This sector must grow internally and externally. The workers (rather crafts people) must lead a decent life. They are doing a very good job; but are they getting any benefit from $20b export earnings?

  • HAQ
    Tuesday, January 1, 2013 07:11 AM GMT+06:00 (90 weeks ago)

    Is it worth it to be a big exporter or even huge foreign exchange earner if it is at the cost of killing hundreds of workers in the process? This will be an achievement if we see smiling, happy and moderately fed and clad workers enter and leave the premises before and after work.

  • Mohammad Nurul Hoque
    Tuesday, January 1, 2013 08:19 AM GMT+06:00 (90 weeks ago)

    BRAVO Bangladesh! Feel good.

  • nazmul
    Tuesday, January 1, 2013 08:50 AM GMT+06:00 (90 weeks ago)

    It is not the political leaders who are accelerating the country's' economy. The most vulnerable Garments workers are boosting up our economy as well country. Hats off only for them. New Year will bring new hope in spite of political threats.

  • Sazzad. DU
    Tuesday, January 1, 2013 10:27 AM GMT+06:00 (90 weeks ago)

    Fantastic news on the eve of New Year. Thanks The Daily Star for this promising news. We want to be number 1 in the world.

  • Quayyum Chowdhury
    Tuesday, January 1, 2013 12:37 PM GMT+06:00 (90 weeks ago)

    BD was bottomless basket in the eyes of in the eyes of Kissinger, USA with soul-destroying but it proved now that it was wrong throwing ash to the commentators after soul searching. However, we are still having insider who are keeping same feelings of Kissinger only because of their Pro-Pakistani feeling who are keeping their eyes close about the present conditions of war torn Pakistan. BD is emerging as an example to the under develop world.


 

 


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